By David Llewellyn-Smith, the founding publisher and former editor-in-chief of The Diplomat magazine, now the Asia Pacific’s leading geo-politics website. He is also the co-author of The Great Crash of 2008 with Ross Garnaut. Cross posted from MacroBusiness

The American academic Robert Shiller has taken another contrarian tack with his latest book Finance and the Good Society. His claim is that Western finance has lost the sense of virtue that it once had. It is interesting to trace where Shiller is wrong, or at least looking in the wrong direction. Because it tells us much about where finance has become post-capitalist and ever more dangerous.

Much of what Shiller says is right. For instance his observation that “financial institutions and financial variables are as much a source of direction and an ordering principle in our lives as the rising and setting sun, the seasons and the tides.” This is undoubtedly true. Indeed, finance IS rules, so it sets the rules of money, and therefore the rules of commerce.

He then goes on to argue that most bankers and financiers aren’t especially bad people, that greed is something of an aberration. He cites the virtuous stalwarts of the past from Goldman Sachs and ratings agencies to show that recklessness has not always characterised the sector. A return to that sense of virtuous service of commerce, he argues, will re-invigorate the strength of capitalism, surely the best economic and political system. Shiller cites Montesquieu’s argument that healthy commerce tends to produce societies less inclined to war and vicious politics (the Frenchman was obviously not writing at a time when some society’s commerce heavily depended on the production of instruments of war, as is the case now).

It is all fine stuff, and there is certainly considerable historical precedent to support what he is saying. Trouble is, it has very little to do with the problems that have emerged over the last decade or two. Here are some objections:

1. It is true that many bankers and financiers are not unusually bad people. They are probably like any other group of people; some good, some bad. And that is the point. It is a systemic problem. The financial behaviour that emerged is just what most would do, given the chance. Blaming individuals is not the way to solve it, deeply satisfying though that often is. Changes have to be made to the system.

2. Shiller makes an error that I think is almost ubiquitous. He assumes that regulation is somehow external to finance, acting on it as an outside constraint. That is not true, as we can see implied in his own quote. Money IS rules and governments set those rules. What has changed in the last two decades is that governments gave up that role, until they could no longer avoid it after the GFC, and traders instead established their own rules, derivatives mostly. We now have a system in which the financial players make up their own rules. Little wonder that the systemic problems are massive (see point 1).

3. Allowing traders to make up their own rules means that the subordinate role of finance, its function of serving commerce, has been altered, very much for the worse. Shiller argues that finance should support business, it should be humble. That is what will not happen in the current system, or at least not happen often enough. It has become a world unto itself, an exercise in gaming a system of rules in a potentially endless regress of making money out of the money made out of money.

4. We are now in that world of “meta-money”. Its most extreme iteration is high frequency trading, which, especially in stock markets, is a travesty of capitalism. The purpose of stock markets is to raise capital to fund public companies. The trading in nano seconds has nothing to do with that; the algorithms make no distinction between companies. It is just an exercise in gaming the rules of share trading. Same with currencies, which is also dominated by high frequency trading.

We would all love to go back to the world Shiller describes.Such virtuous men and women could grace the hallowed corridors of Yale, no doubt, making the odd financial donation. The problem is that it is not going to return. The computer driven monster of meta money has been unleashed. That is the world as it is, not as it once was.

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191 comments

Yes, markets were so virtuous in the past — in the 100 years before the Great Depression, US stock exchanges hosted one scam after another. Has he ever read a history book? Has he read about how Goldman nearly failed in the early 30s owing to its sponsorship of stock pyramid companies? It’s easy to talk about history when you’re making shit up, either out of ignorance or bad faith.

And I think he is one of many who take markets as somehow ‘natural’ and regulation as messing with some ‘eternal order.’

“free” markets … like the black markets for cocaine and heroin ?? sure, there are NO rules in those markets! go ahead and rip off the Russians or the Taliban or Colombians or the Mexicans or the Southeast Asian drug lords … waking up with a horse head in your bed would be a good day.

Maybe he’s talking about that model of public service, the East India Company ??

folks say ‘it’s not about the money’.. hell, it’s about the money.. that’s an old cliche… folks say ‘it’s all about trust, so trust me…’ anyone that starts talking about trust is a fucking liar… additionally anyone that starts preaching about ‘truth’ is most likely a monumental huckster… the sphere of ‘truth’ is criticism… and this blog does a pretty decent job of it… my apologies for not making a more specific comment, however at some point those who continually exploit and benefit from a particularly rigged system must be punished. who cares what their intentions are? that’s a legal fantasy that has never really delivered justice… commonlaw jujutsu notwithstanding,examples must be made… and there are a great many candidates…

Very astute observation ctct. If laws were reform updated so that responsibility and punishment were sole based on action taken by the individual and outcome of those actions on all those persons and communities affected the Law would be much more effective at delivering Justice and much white collar criminal would reside in jail right now. Focusing on intent is a ‘liars game’.

There are plenty of crimes in which “specific intent” need not be proved. But even when specific intent is an element of the offense, intent can be logically inferred, as in “OOPS! JPMorgan Chase’s London office ended up with MFGlobal’s segregated customer funds.” A jury could easily infer intent from that by asking the questions: Why did the funds get sent to London? Why weren’t they returned? (Intent to steal is easily inferred.) Then, the question is not really a WHODUNIT as we are supposed to believe. 1.2 B would not be transferred without CEO approval (John Corzine) and it would not be retained without CEO approval (Jamie Dimon.) Corzine was required by law to demand the return of the customer funds and Dimon was required by law to return the funds.
The interplay between computers and finance and the law is not that complicated.

Not quite true. An examination of the rules for mortgage finance as of about 20-30 years ago gives an instructive example.

Back in those days, the banks had lots of rules involving buy-backs, and reserve accounts. If you sold mortgages to a major bank, you had to deal with a lot of pages of regulations – regulations that had nothing to do with government.

The bankers assumed that originators could not be trusted. The smaller banks knew their customers, and the larger banks were concerned that they would sell them the crap loans and keep the good stuff in their own portfolio.

They may have made money dealing with brokers, but they assumed the brokers couldn’t be trusted and they set up the paperwork to protect themselves.

There is no way that a government could set the rules. They simply did not know all the ways that one financial firm could screw another one.

The only regulations that actually meant anything were Truth In Lending (TIL) and RESPA, and those only worked if the borrower actually read the paperwork. And much of the time the borrower was so eager to get the loan he/she would sign anything.

The reason government regulation is sub-optimal is that we have too many people trying to regulate the parts that they don’t understand along with the parts that the financial outfits will self-regulate in their own defense.

The reason government regulation is sub-optimal is that we have too many people trying to regulate the parts that they don’t understand along with the parts that the financial outfits will self-regulate in their own defense.

While there are certainly elements of truth to what you write, I disagree that this is the primary problem. Using your example of loan underwriting, the problem wasn’t that regulators didn’t understand that crappy loans would cause mortgage backed securities to blow up. Nor is it rocket science to understand that CDS written with little to no reserves set aside won’t be paid when defaults are declared. And when the people at financial outfits can pocket profits while remaining immune from liability, whether via the corporate veil or an unwillingness for regulators/government to bring charges, there is no need to put up a self-defense. See middle seaman’s post below, he hit the nail on the head.

You will notice that I was very specific about the time frame for what I was saying: 20-30 years ago.

What changed (among a lot things) was that the large banks learned that they could buy crap loans and package them in a way that passed the risk to someone else – ie. a small town somewhere in Europe.

They still had buyback provisions, but in many cases, when they tried to invoke them, the originating broker was long gone. All they found was a closed office and a collection of bankers boxes full of miscellaneous paperwork.

And all of this illustrates the point I was trying to make: Sometimes self interest means that you don’t need government regulations. You only need those regulations that protect the consumer.

When self-interest no longer applies, you need detailed government regulation.

One of the times that self-interest no longer applies is when the courts and regulators become so corrupt that self-regulation no longer works.

You wrote:
‘There is no way that a government could set the rules. They simply did not know all the ways that one financial firm could screw another one.’

You are right… To write hard rules to govern finance is an exercise in futility; it is impossible to predict Byzantine behaviours of the financiers in the future Hence government should circumvent the twisted games and not engage in scenario by scenario debate. Rather the government should operate on a principal: Regardless of the details of the financial transaction, if the product or contract sold causes losses to either party, both parties must clean up the mess. Furthermore, to prevent anyone from profiting, the personnel who authored, directed, reviewed and signed the deal , those persons shall must be made personally liable in a substantially significant way until the deal and it’s effects have fully transpired. The effect of this ruling is to remove some of the desire to obfuscate or deceive or the other party and lower the incentive for either parties to gamble on the outcome of the transaction. It would also cut off some of the opportunities to game the rules.

Now… What if the crooked individual within company decides to game the rules and go bankrupt or substantially turnover personnel? Easy… Remove any limited liability cause to the financiers, make the men who crafted and transacted the deal personally liable until the products or transaction has naturally expired… If a deal causes losses, but is not due to any obfuscation, deception, gaming, or bad faith, then only the financial assets of the personnel who were significantly involved would be stripped. If there was any malfeasance, then the financial assets and personal freedom can be stripped. While the situation is being investigated, The Fed prints any money shortfall and the remaining management and the FDIC oversees continued operation, so that the financial system can continue to operate, the depositors are made whole, and lessor amounts for senior debtors. The Fed or Congress, if they are concerned by monetary inflation, could impose taxes on the rest of the financial system to negate the money issued.

Personal liability is critical. The Romans had a governmental doctrine called “responsibility” under which government officials were legally responsible, personally, for *everything* they did as part of their official duties.

The US has, instead, numerous doctrines of immunity and limited liability under which the powerful are allowed to escape with their personal fortunes and lives intact after going on massive crime sprees. We even have more such doctrines than existed in the “divine right of kings” period. It’s rotten and it needs to be fixed.

@Nathanael: I’m doubtful about your idea of the Romans’ concept of “responsibility.” It’s certainly true that they had a lot of laws that allowed, almost required, government officials to be accused of wrongdoing. Part of the problem was the way judgments were rendered. It was well known that various public offices allowed self-enrichment through corruption, particularly provincial governors. Indeed, there was a consensus that if a man had served as a provincial governor anywhere and had not become very rich from it he must be a fool. But the trials were apparently more for sport, and the chance for young men to demonstrate their rhetorical skill, and the accused could be acquitted because of a good turn of phrase. Julius Caesar started his political career prosecuting two senatorial governors, Cn. Cornelius Dolabella (in 77 BC) and C. Antonius (in 76 BC) for extortion in the provinces of Macedonia and Greece, but he lost both cases.

this is all very obvious. What strikes me about this historical moment is that reasonable, pragmatic, common-sense solutions to most of our collective problems are out there but they are deliberately ignored by the corporate state and their propaganda organs who tell us everything is so complicated that solutions aren’t possible. They are!

Clearly this is simply a matter of having criminals run the system. And they are criminals top to bottom starting with the President–mind you they may be charming and even honorable in their way but they are the enemy of most of us.

” Borrow, or be priced out of the market by those who do borrow”. F. Beard, your statement should be framed and hung on the wall. The housing market up to ’08. Student loans and tuition. The cost of everything because of credit cards. Etc., etc., etc. Excellent !

Just so. The putsch with “cheap credit” began in the 1970’s, with the propaganda that only suckers lived without debt. In the beginning, credit card interest was tax-deductible: the cherry on top of the banana split. This is what drove hyper-inflation, and it helped lead to the Crash brought by Bosky “junk” excesses.

More fundamentally the 1970s was when real increases in wages stopped for a lot of people, while the costs of basics like housing, education, and health care began to climb. This was initially compensated for by the entry of women into the workforce and (later) by easy credit. But it wasn’t that the working/middle class suddenly became profligate. They were (and are) being squeezed.

One more hing. Banks have tried to perpetuate the concept that they are removed from the constraints of time. But this is what killed them. Funny. Or m maybe not. Greenspan and all of his conspirators, or erudite compatriots (?), told us to just go along with it because we would not be hurt. Right. The Business CYcle has been tamed! …. what does this mean Mr. Greenspan?

What utter apple sauce! So according to your logic, Government should never regulate anything it does not understand? What about the FDA? I suppose we should simply let big Pharma shove out their doors whatever potion they claim will save lives? Your hubris is breathtaking but true to form here. You finance guys think you have invented some kind of magic elixir? What else it is if not the exchange of money for the promise of returns? The endless loopy search to offload, hide, circumvent and disguise risk is a shell game. If you are trying to offload risk then you do not understand what you are lending to and therefore you need to be booted out of the business not given more and more money so that you can keep shoving it into other people’s pockets and call yourself the second coming of Einstein. What gives you the right to claim that you should never be regulated? ANYONE can build in needless complexity and crap into a system and then claim that they alone understand it and therefore the Government has no claim to regulate it. Its amazing, utterly stupefying to read such drivel. Engineers in the last 100 years have invented and fashioned things that are a million times more complex and we have never claimed we are above regulation, in fact on the contrary there is firm advocacy that more complexity leads to more risk in the Engineering community. It seems apart from regulation the one thing you Bankers need more of is humility.

Nice try Paul Art, but actually I’m not a finance type. I have been a software engineer for a whole lot of years. The fun part of that job is that a lot of people have to explain how their business works. If you don’t know that, you can’t develop the system.

My wife was the mortgage loan person and I wound up learning more about that subject than I ever wanted to know.

It would be nice if regulators had some kind of engineering discipline, but too much of the time they are as full of ? self pride ? as you seem to be.

When the Chinese began selling toys with poisonous paint, our regulators put a bunch of small US craftsmen out of business. They required inspection for each toy and a cost of about $1500 per item. If the local guy made toys in more than one color, each product required a separate inspection. If the toy was all-wood with no paint, it still needed to be inspected.

What they didn’t know (or care about) was that a lot of the US guys were running a small home business out of their garage. They didn’t use poisonous paint. They weren’t mainland Chinese.

The cost of the inspections was greater the the profit for an individual item, so a bunch of small businessmen didn’t get to have a Christmas themselves – because they were out of business.

Because of too many instances of this kind of self-defeating arrogant regulation, the banksters and other crooks have been able to get a lot of support for deregulation.

You wouldn’t turn some one loose to build a bridge without a lot of technical skill and common sense. Regulation ought to require the same intelligence and discipline.

Jesus Christ, if there’s nothing more f*cking tiring and banal than listening to yet ANOTHER libertarian tech-person spout off about how regulations are a bane to society I really haven’t found it yet.

Seriously, the next time a libertarian techie starts to spout, someone should just pass out hammers so everyone else can just bash their own brains out instead of listening to such drivel.

Here’s a great example of said nonsense:

“It would be nice if regulators had some kind of engineering discipline, but too much of the time they are as full of ? self pride ? as you seem to be.”

Regulators are full of self-pride?! Are you serious?

Answer: no, you’re not.

So, people become regulators – in any industry – because they want to see their names in lights, right?

They like to take lowly positions at the now gutted regulatory agencies because they’re going to make a name for themselves?!!

That sounds about right, huh?

As concerns your toymakers in the garage, why I had to stop reading your post to dry my eyes the story was so sad.

Gee, the toymaker’s name wasn’t S. Claus was it?

Did he have to fire his workforce of dedicated “little people” too?

Maybe the ’80s welfare queen could pick him up in her limousine.

Oh that’s right there’s probably not enough room for any more anecdotal fabrications what with her progeny and all.

Libertarian techies – Neanderthals leading the world into the future!!

Oh no, I called someone a liar because some toymaker got put out of business because society decided – hey, maybe our children shouldn’t be sucking on lead or eating phthalates.

Cry me a f*cking river!!!

Because you can come up with a singular example, why then let’s have NO LAWS at all, right?

Oh, I guess next you’re gonna talk about the poor, down on his luck asbestos miner?

The DDT manufacturer?

The tobacco companies?

Well, guess what, libertardians?

When, society decides they don’t want their children to be poisoned SOMEONE probably is going to have to pay.

Every time ANY law is passed, all we hear is the bitching and moaning, bitching and moaning of the libertardians about how unfair it is to live in a society of laws.

About how it’s just unfair that they can’t sell substandard crap to unsuspecting human beings.

Give us all a f*cking break and quit harming us.

What don’t you understand about people not wanting to be poisoned, killed or stolen from?

Oh, that’s right, you’re defending the poisoners, the killers and the thieves.

I forgot.

Lastly, I just love how you all have soooooo much compassion for the small business owner who – gasp – might have to shell out some bucks but when it comes to the genocidal levels of pollution that your fellow industry cohorts pump into a catastrophically warming environment, why mum’s the word, eh?

Instead of “Would someone PLEASE think of the children?” it’s “Would someone please think of the poor toy makers and how hard it is to NOT poison the children?!!”

We want to poison the children but it just costs to much to make sure we don’t, boo f*cking hoo.

Hey, here’s an idea, libertardians.

Maybe you shouldn’t be in favor of all the free trade agreements that lead – nudge, wink – to the swamping of the industry with Chinese toys in the first place, huh?

Nah, because then you’d have no slave labor to exploit to make your other crap, right?

Jsmith, pay attention. Note that the bad regulations were specifically designed by the big companies to put the other companies out of business, complete with hiring the regulators out of the industry.

This is different from garden-variety food safety regulation. This is what we call “regulatory capture”.

We need regulations (the people who disagree are idiots, and don’t know what the 19th century was like) *but it matters what the regulations are*. It’s just as easy to make regulations which PROMOTE poisoning the public (remember the MBTE gasoline additive?) as ones which PREVENT poisoning the public.

I would have given up on this whole dialog and let you have the field, but I’ve been mildly amused (and annoyed) by your complete lack of logic and I wanted to find out just how far you would take it.

As I remember, you first stated that as a financial type, I couldn’t possibly appreciate the mindset of an engineer.

When I pointed out that I am an engineer, not a financial type, and that people who want to regulate should have a kind of technical professional attitude and training themselves, that wasn’t OK either.

Then I am supposed to have accused regulators of wanting personal fame. I didn’t say that – if I had wanted to insult them I would have simply accused them of delusions of competence.

I gave you an example of the toy-makers who had been put out of business (thanks to Dan_in_KC for the link) and your response was “cry me a river”.

With that statement, you have demonstrated who you are – someone who doesn’t give a damn about other people.

You don’t like nuance – you do like to argue. And if necessary you will argue with your own point of view.

That pretty much makes you a waste of oxygen. If you have anything else to say I will declare you the “winner” and let you argue with yourself.

It’s amusing to see that you’re so upset that you conflated the posts of myself and another poster.

I never thought you were a financial type.

I jumped in when I knew you were a libertardian tech person.

That’s ok, though, leave the attention to detail for your professional life. I’m sure you’re a champ.

Anywho, you’re right I love to argue and there are two arguments I like to argue against.

The first is yours – I call it the Chamber of Commerce view of humanity – in which life begins and ends – at least on paper, nudge wink – with the small-business owner.

God forbid that anything happen to the small business owner!!!

As fatuous the claim that the US Chamber of Commerce represents the small business owner, so too is the libertardian claim that they care about anything except themselves and the largesse they receive from corporations.

God bless the toymakers, they shall inherit the earth.

The second point of view I love to argue against is that of those nuanced “liberal” do-gooders who we are supposed to believe somehow do not recognize how completely corrupted and unsalvageable the current system is and who enjoin us to “work within the system” and “call our Congressmen”.

jsmith – you can make up all sorts of things you ‘imagine’ I must believe and then argue with that straw man all you like. In the end all you are doing is digging yourself a deeper hole to wallow in with your festering anger.

I won’t disagree that we need regulations but as others have pointed out we need the right regulations, and they need to be enforceable AND enforced (not just against small mom-and-pop toy makers but against in the financial sector too). If you want to use the what appears to be a ‘slippery slope’ argument go ahead (disagreeing with one regulation must lead to elimination of ALL regulations), but that is a pretty childish approach..so I too agree that you are a waste of oxygen.

Maybe smarter regulation would have been more appropriate in this case. Instead of requiring each style & color of toy be tested, perhaps the regulators could approve a number of authorized paints & finishes and require each toy manufacturer, large & small, to annually produce receipts for authorized paints & finishes in an amount sufficient to account for the year’s production of toys? Should a large Chinese manufacturer decide to use an unathorized paint or finish, they would still have to provide proof of purchasing the authorized paint/finish making the use of toxic finish non-cost-effective. However I know that’s not how this world works…

let’s get serious-the problem is LACK of regulation-thrown out under bushit, and prior-this is how Wall $treet went insider trading-derivatives, commodities,
etc, etc. As stated, FDA needs be there-read your history-Sinclair Lewis.

Bushitters simply reduced oversight, and blew up transparency. 18 year military comptroller was FIRED because she was correct on corruption…

Today bushbama attempts retribution against whistleblowers…we know who desires this deregulation-again, they blew up the economy…why would you trust these guys??

Perhaps you love bushit end of “Public Utility Holding Company Act”-you’ll love your electric and water bill after “austerity” privatizes taxpayer provided infrastructure and double-triples rates-already been done…

Good points. Government today is part of a corporate-state. A government for the corporations by the corporations. The old USA is gone–it’s not the end of the world but it is, like the famous Monty Python parrot skill quite dead. Now, what next? That requires a look at the landscape and find what institution private and governmental can create a movement for reasonable and rational system-based solutions to the collective problems we face–they are there but if they make sense they are rejected by the corporate state and the propaganda organs, i.e., the mainstream media that tailors the same message (more or less) to different tribes and creates phony divisions based, largely, on misdirection.

No, “money is rules, and governments set those rules” is EXACTLY CORRECT.

If the USG did not require taxes to be paid in USD, the USD would become worthless in pretty short order. The same is true for all governments’ official currencies. Add this situation to our general insistence that money have a debt/interest basis and the outcome cannot be other than it is. Mere ‘regulation’ just re-arranges some of the deck chairs.

OK. This is the profound, bedrock argument about money. What is its value? I think money is a generic grease. Its value does not change on this planet. And it should be calculated and maintained strictly on human need. Not human profit.

Yep. “Generic grease” is about right. Money is valuable because other people will accept it. It allows for transactions between people who don’t entirely trust each other — and therefore “greases” the wheels of commerce.

Singapore is the new Switzerland. Let’s see, US stalwart Proctor & Gamble announced they are moving A HQ to Singapore (just for proximity to Asia of course), and now Eduardo Savarin, Co-Founder of FB..renouncing citizenship to Singapore (months ago, prior to IPO. No Capital Gains. Actually better than Switzerland now that we’ve turned up the heat on them.

Perfect symmetry: The Chinese own our debt, now they get to have our billionaires and corporations. The global race for “capital to flow where it is least regulated (and taxed) is a race we started and collude with governmentally, internationally, as directed by the 1% of the global wealth.

I propose that people who surrender their citizenship be restricted from the US to visit or live. Permanently. Dual citizenship requires taxes, proportional to the citizenship.

As far as corporate: Corporate taxes should be allocated to an equation of a % of proportion of amount of location of corporate and sales representation resides and % of sales in that country or region, divided appropriately. No filtering through double dutch sandwiches, etc.

“I propose that people who surrender their citizenship be restricted from the US to visit or live. Permanently. Dual citizenship requires taxes, proportional to the citizenship.”

Americans who have never lived abroad have a hard time seeing that this is no longer the punishment that it once was. I’m returning to the US for family reasons, but if it weren’t for that, there’s nothing in particular that it has to offer me. Actually, I will be far worse off in the US, since I’ll have to pay tens of thousands of dollars a year for extortionate health insurance.

I’m mildly annoyed at myself that I never bothered to apply for EU citizenship (all it offered me beyond what residency did was the right to vote) and that State-side family matters are pressing to the extent that I can’t hang around for the length of time necessary to go through the bureaucracy.

Hell, even Michelle Bachmann is lining up Swiss passports for herself and her brood.

There are laws that were put in place to protect all parties regarding property. There are Tust laws and Federal Laws and State Laws that govern legal liens and the way that Trusts are to be set up. Just because they skipped them doesn’t mean there are no laws. The reason the steps were skipped was not due to recklessness or sloppiness. These missed steps were intentional and have been described by banking regulators and Law Enforcement as Predatory Practices. They broke the law in order to commit massive fraud in our names with our signatures and notes. Because of these crimes, the mortgages and notes were rendered a nullity. There is no statute of limitations in regards to the discovery of fraud…..for example the QWR…. All of the Transfer Laws,
Recording Laws, TILA and RESPA laws still apply. Property Law is power.

Problem is that people are brainwashed into believing that if they don’t pay the mortgage they automatically lose. That belief is allowing these criminal banks and GSE’s to steal our property from us with impunity and with no LEGAL standing. They do not own the right to collect any money or your property from you unless the can prove that they have that right. UCC 3-501 requires the lender to show authority to make demand for payment if it is merely a servicer. UCC 3-501 requires a lender to “exhibit the note” when lender makes a demand for payment. This UCC section also allows the borrower to discontinue payments without dishonor until such time a note holder or servicer complies with all laws and contract provisions. The lender also must go through certain steps to prove up a note (make it enforceable) and must give adequate production. It is a lack of knowledge and that is allowing corrupt criminals to steal our property.

The people need to know that these mortgages are not only unsecured debts but unsustainable and insolvent debts because of massive fraud that these banks and GSE’s committed with our electronic signatures…..Because they oversold interests in our mortgages as bonds and interests in our notes hundreds of times per mortgage and note, as seperate instruments these mortgages and notes are nullities and insolvent. There is $1.2 quadrillion dollars in derivatives fraud and $8 trillion in real estate…There is no collateral backing up this massive bankster debt fraud….at all.

The IMF and ALL OF THE INVESTORS must be told that what they were really sold was a GAMBLE….the gambles were oversold and crapped out when the housing bubble burst. They all made a lot of money while it lasted but it is all over now. Sorry., but you guys DO NOT OWN A LEGAL INTEREST IN OUR PROPERTY…YOU NOW OWN A CREDIT SLIP TO A CRAPPED OUT GAMBLE. SEE YA…

Many of these mortgage notes contained a waiver of “presentment,” which is the process described at UCC 3-501. In view of the circumstances, that is probably an unconscionable provision and the waiver provision should be declared void as against public policy. Thanks for the inspiration, Chitown. I do so enjoy your thoughts.

Mortgage Backed Securities (MBS) were never created. The notes and mortgages were never transferred to the securitization trusts. This is easy to prove. The trusts are empty. That is, by definition, securities fraud. Certificates were sold to investors which the prospectus of each claimed were backed by notes and mortgages when the certificates are backed by nothing. Another part of this crime is that homes are being taken without the foreclosing party having possession of a lawfully endorsed mortgage note or a lawfully assigned mortgages. Where are the mortgage payments or, on foreclosure, where are the proceeds of sale of these homes being paid? To offshore accounts. Millions of mortgage notes have been discharged by foreclosure sales and/or through bankruptcy and have not been returned to the makers (homeowners who have lost their homes to foreclosure.) Are images of the notes, not the notes, being traded in commerce long after the collateral has been sold?
These transactions have all resulted in “fraudulent gains” to those who sold the certificates and took the homes. The entire multi-faceted scheme has been concealed so that the regulators, the lawyers and the courts have yet to see the whole picture. But these proofs are clear: there is no collateral in the securitized trusts, there are no lawfully endorsed notes or lawfully assigned mortgages, there are no payments to the trusts upon foreclosure and no notes are being returned to the makers upon “payment” via foreclosure. Follow the “money”. . .

The Pooling and Servicing Agreements (PSAs) have a list of addresses of properties which were supposed to be in the trusts, but the audit will disclose that the mortgage notes and mortgages were not transferred within the 90 days plus the grace period (if any) under IRC 860D. The mortgage notes and mortgages could not be transferred into the trusts after the cutoff date without the trusts losing their special tax treatment. The only time the mortgage notes and mortgages are made to appear that they were transferred into the trusts is by forged documents created for the purpose for foreclosures in foreclosure by action states or when a homeowner seeks an injunction in a foreclosure by advertisement state. There are special document forgery operations which exist solely for the purpose of creating these false documents, called document mills and quite a few law firms have acted as document creators. There would be no need to forge documents if the notes and mortgages had been lawfully transferred to the REMIC trusts as required by IRC 860D.

This global, criminal business plan demands the greatest of concentration to grasp and the most deliberate articulation to express. Lloyd Blankfein could not explain a credit default swap (a/k/a derivative) to Congress. PBS (4/24/2012) in “Money, Power and Wall Street” concluded that the “exotic instruments” were so complicated that no one can figure them out. I don’t think it is hard to figure out and neither do you. The derivatives (meaning “derived from”) are based on nothing. They have sold 1.2+ quadrillion dollars worth of nothing. I wonder if the ultimate bet is long on “we won’t get caught.” I’ll take the short position on that bet and I will raise them a whole lot of nothing more.

If “virtue” is replaced with “usefulness” or “functionality,” this post is short and sweet. It is never the people; it is always the system. The financial system merged, as in a merger, with the willing government and swallowed it. From that point on, it stopped being a financial system in support of business and became everything. Hence, the corruption of finance as we see it now.

That must have been at 9:45 eastern time on a Thursday in May 1956, because it was nothing but a den of thieves for the preceding one hundred years and the succeeding fifty six. How can anybody write an entire book premised on such errant nonsense? Why would anyone else bother to read it?

That must have been at 9:45 eastern time on a Thursday in May 1956, because it was nothing but a den of thieves for the preceding one hundred years and the succeeding fifty six. How can anybody write an entire book premised on such errant nonsense? Why would anyone else bother to read it?

When I read “western finance lost the sense of virtue it once had” my jaw hit the floor, too.

I guess Shiller’s reasoning goes something like, “howsoever despicable western finance has been up to the recent past, it has yet lost something of the little virtue that it had.” Hmmm. Well, perhaps. But, really, that wasn’t a very far fall, now, was it?

“On the other hand, looking back, I wonder at my own
lack of insight and foresight. It seems to have required a
certain degree of skill on my part to escape the opportunities, the great opportunities, fortune flung in my way; as, also, a certain perverseness seems to have been necessary to cause me to wallow, as it were, into the misadventures in which I from time to time involved myself. For instance, a participation in the great success of the Calumet and Hecla — the bonanza mine on record — was in 1868 almost thrust upon me; but I preferred to “invest” in some wretched Michigan lumber railroads, which I long ago dropped as hopeless.

“None the less, however, I did get through; and got through better than I had any right to expect — indeed, successfully, as success in such things goes. That, in place of my suffering financial shipwreck, it so fell out was the result partly of persistence, partly of judgment, largely of luck.

“Indeed, as I approach the end, I am more than a little puzzled to account for the instances I have seen of business success-—money-getting. It comes from rather a low instinct. Certainly so far as my observation goes, it is scarcely met with in combination with the finer or more interesting traits of character. I have known and known tolerably well, a great many “successful” men—-“big” financially-—men famous during the last half century, and a less interesting crowd I do not care to encounter. Not one that I have ever known would I care to meet again either in this world or the next ; nor is one associated in my mind with the idea of humor, thought or refinement. A set of mere money-getters and traders, they were essentially unattractive. The fact is that money-getting like everything else calls for a special aptitude and great concentration, and for it I did not have the first in any marked degree, while to it I never gave the last. So, in now summing up, I may account myself fortunate in having got out of my ventures as well as I did.

“Taken as a whole, my life has not been the success it
ought to have been. Where did the fault come in? I think
I can put my finger on it. I began with a scheme of life;
nor was it a bad one. It was to establish myself at fifty; so that, after fifty, I would be free to exert myself in such way as I might then desire. Life, also, I regarded as a sequence — one thing, accident apart, leading to another. I followed this scheme rather successfully, and for a long time. I got well under way in 1869, being then thirty-four. I had been through my early experiences, nor had they been lacking in variety. I had enjoyed college and society, and got a glimpse of early professional life; a glimpse of that sufficed! Then came the army, an exceptional break. After that, I was married at thirty, and, by the time I was thirty-four, I had caught the step. At forty-four, I resigned from the railroad commissionership, having achieved a success, to become, first, the Chairman of the Board of Arbitration of the Trunk Line Railroads, and then, immediately afterwards, the President of the Union Pacific. These were both natural sequences from what had preceded. The Trunk Line Arbitration was not a success. The time for it had clearly not come. Just the right man in the position held by me might possibly have worked out very considerable results; but I doubt; and, certainly, I was not the man to do it. The whole thing depended on Colonel Albert Fink. I was merely his instrument; and I gravely question whether conditions were at that time ripe for a successful development on the lines Colonel Fink contemplated. Nevertheless, that I was tendered, and for three years held the position I then did, was a sufficient proof of the standing I had attained. Unconsciously I had now come to the parting of the ways. I knew it, thoughtfully pondered it — and took the wrong road!”

Money IS rules and governments set those rules. What has changed in the last two decades is that governments gave up that role, … Yves Smith

While continuing to backstop the financial system with deposit insurance, a lender of last resort and needless national borrowing among other privileges for the banks.

Yes, the problem is systemic. We need coexisting government and private money supplies (cf. Matthew 22:16-22). Let the private sector have its own money supplies and rules but without ANY government backstopping and let the National government merely spend its fiat into existence and tax it out of existence.

We have a mess because we conflated government which is force with the private sector which should be voluntary.

I agree with Schiller on this. And yes, the signer is as much at fault as the banker is. I myself watched everyone around get themselves in debt, not because they were afraid of getting priced out, they were GREEDY and afraid of not making profits. I saw this first glance and when I confronted them and told them of the risk, not only did they laugh at me, they sent me to hell.

So Yves, they should not get a free pass. Nor should the bankers who knowingly pushed the garbage. To Schiller’s point bankers are just like any other group of people, some are greedy, some are not.

Ahh, but is the borrower required to have expertise in loan underwriting, e.g. DTI limits?

If a diabetic patient loves ice cream and her doctor tells her a bowl of ice cream with every meal will not adversely affect her blood glucose control regimen, she will obviously be happy. She could even be accused of being a glutton. But should she be held equally responsible for her ensuing diabetic complications?

First off a banker is not a doctor and a borrower is not a diabetic. Second, both have brains in their heads.

The intent of the banker is not to give advice, its to make commission. They are taking the risk in giving you the $ and should lose if something goes wrong. Remember all the realestate “investor” parties?

The signer’s intent, albeit not all, was to make profit. Greed is the issue let’s not sugar caught it.

ONE-HALF of all mortgages in the hot states (Arizona, Florida, California) went to speculators who were buying three and four houses.

The speculators did not care about mortgage rates (as they were going to be flipping the house, anyway). They pushed the prices up for everyone. There were more than a few realtors in there doing this.

Joe Six Pack saw the prices going up, thought that if they didn’t get in now, they’d never get in, realized that some idiots would actually lend them money (with nothing down), and jumped in.

All of them (homeowners with no stake in the game, bankers who passed the risk along by securitization, speculators) had one big party.

THEY caused the mess, and again, as always, expect the responsible to pick up the pieces.

In Florida after Katrina, the flipping racket was intense, and the “improvement” need not have been built, not even the foundation poured. “Flipping” of blueprints was the hottest game around. How was MERS involved?

It is global totalitarianism sneaking its way in first by secret socialism than secret communism. Socialism was and is disguised by being called other things to ROB US …like THE FED, FAKE MONEY LENDING, taxes, THE NEW DEAL, social programs, social security numbers, BAILOUTS, TBTF, FAKE NATIONALIZATION, GLOBALIZATION WHICH IS REALLY RE-DISTRIBUTION OF OUR WEALTH (ROBBERY), Government healthcare, GSES ….It is all SOCIAL ENGINEERING…BRAINWASHING in order to ROB US…. Communism is being disguised as a fake war on terror, national security, owing money which is massive, unsustainable debt fraud and the color of law. They have used the METHOLOGIES of Marxism, Leninism, Nazism, Alinskyism, all of the isms disguised or called other things to rob us and install an IDEOLOGY….A BIG IDEA…..A NWO tyrannical Totalitarian dictatorship under the radar. If you can’t put your finger on it, it is illegal and it makes no sense…..it is the NWO…… FRAUDSTERS and their IDEOLOGY..

“The intent of the banker is not to give advice, its to make commission.”

So this, right here, is the root of the problem. The working assumption now is that the banker is not a professional to be trusted, but instead a schemer, just in it for the money like any three-card-monte dealer on the street corner.

I remember when Mr. Potter was considered the villain of “It’s a Wonderful Life”, and George Bailey was the hero. Guess I just got that whole movie wrong.

What would you do if you sell TVs, beds, toys, blah and your salary was based on commission? People …. it takes 2 to tango. Unless you are telling us that most Americans are stupid idiots that can’t think for themselves.. Is that the case?

Of course not. The banker was unprofessional and the borrower was greedy. We don’t have to bail out neither.

The fact that is being hidden from the masses is…… the banks were the greedy borrowers of the peoples money. They accomplished this by brainwashing and deception. The Supreme Court ruled Corporations are people because the traitors in CONgress sold our BIRTH CERTIFICATES to the IMF to create CREDIT FOR THE FED TO USE TO CREATE WEALTH OFF OF THE BACKS OF OUR LABOR..THE TRAITOR POLITICIANS TURNED THE AMERICAN PEOPLE INTO COMMODITIES ON WALL STREET…WITHOUT OUR KNOWLEDGE OR CONSENT….!

“The working assumption now is that the banker is not a professional to be trusted, but instead a schemer, just in it for the money like any three-card-monte dealer on the street corner.”

Well, they mostly are. You gotta deal with reality as you find it. The megabanks have discussions about how to extort more fees from people who can’t afford them; several of these are documented due to leaked meeting notes.

You wrote:
“The intent of the banker is not to give advice, its to make commission. They are taking the risk in giving you the $ and should lose if something goes wrong. Remember all the realestate “investor” parties?”

You are wrong. The first intent of the banker should be to do is F–king job properly, and that is to loan out prudently so that it can be paid back. If that banker had all personnal savings tied up in that loan, and he did not rely on an army of lawyers and the power of the government to enforce the contract, the banker act with proper caution and prudence and intent.

This is not to say that we should abolish mortgage contract laws and enforcement. Rather, both are needed to protect against unscrupulous and reckless people. Else, society becomes vulnerable to the chaos of predation and vigilantism.

The banker must be the prudent professional, that is why they oversee other people’s money. They should be selected for their understanding of business and money, and for their integritty of actions. Ideally they should also possess acuity concerning the psychology of people. Where as we do not expect this of the consumers… Many people are pathetic in planning with money, but they may be people of great merit, and all should be properly advised.

If what I demand of our nation’s bankers is too much, then they can retire now so that men of good faith can replace them. A banker, whose primary intent is to generate fees, is nothing more than a pizza delivery boy in a pinstriped suit. He is not suitable to handle money.

Well said Heretic. That’s the core of the problem. The finance industry have been allowed to change their business model to that of dodgy salesman, whilst retaining their protections as trusted merchants of commerce.

Well said, VP.
“The finance industry have been allowed to change their business model to that of dodgy salesman, whilst retaining their protections as trusted merchants of commerce.”
I will use that argument the next time I try to get a judge to see that the bank he or she is protecting under the delusion that it is a trustworthy guardian of the people’s wealth has committed forgery and perjury through its lower level employees and has forfeited all protection. The problem to which Chitown refers (judges protecting racketeers) flows from the mistaken perception that the banks deserve special protection as guardians of the people’s wealth. Google bank fraud and you will see the legal protections for banks. Soon we will google bank fraud and see “forgery, perjury, theft of US assets paid to offshore trusts circa 2002-2012.”

The horrible economy proves the bailouts were fraudulent and the ongoing bailouts are even more fraudulent…….simply put they are robbing us out of existence….. The banksters are getting richer because they are simply pocketing our wealth. They have not taken a dime of Taxpayer bailout money to pay back what they have stolen from US. The trillions in mortgage money the FED is collecting every month is TAX PAYER OWED MONEY…..THEY ARE POCKETING IT….THAT IS FRAUD…..If that money was going to US……WE WOULD NOT BE IN A DEPRESSION…THE WORSENING DEPRESSION IS ALSO A RESULT OF FED BANK FRAUD….!

This was a Hitler Plan and it was done by the use of weapons of mass deception by the banks and their minions and cohorts .. The courts have ruled that “Deception is evaluated from the perspective of an unsophisticated consumer.” WE THE PEOPLE were SET UP TO FAIL without our knowledge…! THERE WAS ABSOLUTELY NO DISCLOSURE THAT THEY WERE GOING TO OVERSELL INTERESTS IN OUR NOTES AND MORTGAGES AS SEPERATE INSTRUMENTS……RENDERING THESE MORTGAGES AND NOTES INSOLVENT. MOST AMERICANS DO NOT EVEN REALIZE THAT WE THE PEOPLE WERE THE LENDERS AND THE BANKS WERE THE BORROWERS AND THE BANKS PLUNDERED THE PEOPLES MONEY AND CREATED $1.2 QUADRILLION DOLLARS IN UNSUSTAINABLE DERIVATIVES FRAUD WITH OUR ELECTRONIC SIGNATURES….TAKE THAT YOU GOVERNMENT SHILL…!

You know chitown2020, you are disgusted with the corruption in the banks and government, so am I. How do you propose this situation can be corrected? I have thought about it, and this is my conclusion; any private market player that seeks to act honestly toward the 99% will be out maneuvered and consumed by its less scrupulous competitors. Why? Profita are important for any private institution, and an unscrupulous player, can in the short term, via market deception increase its profits so much that it will eventually buyout the hinest player, or use laws and refulations via corrupt judges and politiians to trip up the honest player. So then what can be done by the 99%? Do we engage in market abseentiism? Not so useful, since the corrupt bankers will still sell out the country underneath us. Do we engage in vigilantism? No, we are a civilized people. The only real option is to push for a stronger more active media, and the elect government officials who will act on out behalf to undo any harm done by the banks and undo any twisted regulation, and for we the citizens to remain vigilant and active, less the corrupt creep into the government again.

As for our electronic signatures on the quadrillion dollars of derivatives, if i may use some metaphor; these are all issues written on a piece of paper, they can be undone with another piece of paper. We are the 99% of one the strongest nations on earth… The foreign bankers will be mad, but do you think that can enforce a contract against us?

Heretic…not legally only deceptively can they enforce their bogus contracts. That is why I am trying to alert the people about the deceptions. I believe it is our patriotic duty as Americans to spread the knowledge and share the truth. I am only able to do this because, thank God, others did this for me. United We Stand…

Sir, (or madam,);
“…money is the root of all evil.”
I think the quote is; “The love of money is the root of all evil.” Add the love, and you have the (i)moral element of greed in the equarion. There you are dealing with human emotions, a proper place for ‘regulation’ of all types. As anyone who has had extended experience with young children knows, absent some guiding hand, (we can debate the visibility issue later,) most, indeed all, children descend into infantile, egocentric behaviour patterns. The Financials fit this pattern perfectly. Someone needs to be the Parent here before the ‘Kids’ start playing with matches and burn the, oh wait, do I smell smoke?

You are right about the human component. Money on itself serves a very important purpose, a way of storing your work, a way to exchange your products and services.

Both forces would starve if the real 99% stood up and sends them both to hell.

We have 2 competing forces when it comes to your point. The elite who find a way to slowly steal wealth by slowly devaluing the currency.. This includes the rich banker and your average politician.

On the other side you have the entitled government classthe unions, and others, who benefit from government handouts. These people cant have enough and believe governtments can create wealth by simply printing.To avoid the lashouts, I am not talking about the poor who really need it.

Defiant, remarkably you’ve described as a benefit that which is in fact the most pernicious aspect of money and which is reponsible, in effect, for the extreme global crisis that we now face.

Because it can (abstractly and theoretically) “store up” excess productivity and resources, we have found ourselves in a situation where not only are we locked in to increasing production (and its Siamese twin, destruction) exponentially, we have a situation in which there are currently More Claims on Future Goods and Services than can be supplied by several planet Earths, much less just this one.

This causes some of the weaker-minded among us to speculate about space colonization, which would be hilarious if it weren’t so pathetic. A society in obvious catabolic collapse can’t keep the roads paved, much less colonize Mars.

Lets clarify something, the fiat system is based on fraud, continuous devaluation. So it does not “store” wealth for the long term, it does for the near term.

The crisis you mention is due to the opposite of what profess. Credit creation makes people feel they can afford things now instead of waiting to save enough to buy. Salaries will remain stagnant while credit drives up the costs until you hit the wall.

This is why a fiat system, be it controlled by bankers or government does not work. Because it is synonymous with fraud.

In terms of storing excess blahjh. I hear people talking about how others should be ripped off of their hard earned cash – why don’t you start with yourselves first. Show us the way socialists – start giving away your possessions and paychecks. We will follow your lead.

Fiat systems work just fine as long as everyone involved knows what they’re dealing with. In fact, they’re the most ancient form of money.

The first time someone said “I’ll do this for you, and you’ll owe me a favor later”, that was the precursor of the fiat system. The true prototype was when these tokens started being tradeable (which happened in ancient Sumeria).

One key feature which is necessary for fiat systems is inflation, or alternatively “jubilees”. Debts have to be wiped out intermittently or continuously; the holder of the favor tokens, who holds a claim on future work, needs to accept that he’ll get less and less as he puts off actually claiming the work he’s owed further and further into the future.

Anything else leads to the exponential-growth impossibility and catastrophe, as lidia describes.

Fiat systems work just fine as long as everyone involved knows what they’re dealing with. In fact, they’re the most ancient form of money.

The first time someone said “I’ll do this for you, and you’ll owe me a favor later”, that was the precursor of the fiat system. The true prototype was when these tokens started being tradeable (which happened in ancient Sumeria)..

“Loans create deposits” so bankers are essentially counterfeiters. They do so via government privileges such as a lender of last resort, deposit insurance, Federal Government borrowing, legal tender laws for private debts and so forth. Thus banks are government backed counterfeiters.

Because banks are counterfeiters, they create negative real interest rates in whatever they lend for – typical examples are houses and higher education. Negative real interest rates means that one must pay to save! Thus those who don’t borrow from the counterfeiting are at a disadvantage to those who do borrow. Thus people are strongly compelled to borrow from the banks.

Thus you are wrong when you say “the signer is as much at fault as the banker is” since the borrower is under compulsion.

We vote but, WE ELECT NO ONE in a rigged 2 party system. Meet the new boss, same as the old boss. People are sheeple and accept 2 choices for President as an election..! HA…! No one is going to make me believe that the American people have never elected outside of the 2 party line. Our elections are a 2 party sham used to enrich THEIR CANDIDATES…NOT OURS. We are brainwashed or brain dead take your pick.

Can’t disagree with you much, chitown; at the national level, this country hardly qualifies as a democracy, and it’s just as bad at the state level in most states. And at the local level in many states.

Heck, even some of the 2-party candidates are “too threatening” and die in mysterious airplane accidents. Or, in the case of Al Gore, who threatened to do something to stop global warming, the election was simply stolen outright by five criminals on the Supreme Court.

“Blaming individuals is not the way to solve it, deeply satisfying though that often is. ”

David Llewellyn-Smith probably knows this, but just to make sure it is said: Failure to hold any individuals responsible (including sending some to jail) is a systemic problem.
We need to make many systemic changes and one of those is to start enforcing the law, even for the finance sector.

Defiant,
I think what you say is true and that you speak for many. But I also think this is only one part of the truth, that if we followed just what you have outlined, the society we would create would be harsh and barren.
All economies from the Neolithic Revolution until now were based on scarcity. If others got more, we got less.
But a knowledge-centered economy will have large areas of abundance. In those abundance sectors, we will rise or fall together. If others get more, we will get more too. For two reasons. First, because much knowledge is more useful when held by more people, more opportunity for someone to expand and improve the knowledge. Second, because if we try to exclude some people from knowledge (which is exactly what we are doing now as we try to fit the knowledge economy into the rules that used to fit the thing economy), that act of exclusion will cost the overall knowledge economy so much that only the tiniest handful of people could be better off. One would need to have an incredibly large slice of that very much smaller pie.
That is exactly the source of the current crisis.
This means that not only will how we organize society and production change, but so too will the very nature of what it means to be an individual.

Let explain what a real free market would look like and then will compare with the socialist, aka free loading thieves.

A free markets requires a non-fiat currency, like gold, which would limit government theft. The rates are set by the market. You want to Allende, you decide the rate, the borrowers.decide if this suits them. If you lose on a transaction no-one gets bailed out.

In this scenario money, capital flows from the irresponsible to the responsible. There is no misallocation of capital, as doing such means failure and no bailout.

The solid currency means bankers nor governments will steal your hard earned wealth. It measure that the more productive society becomes, the more earning power they should have. This is sharing the wealth ok?

Socialism pushes for governments to fix all our troubles. The issue is, the people in government are rich and wont shoot themselves in the foot. So a government jubilee does not mean what you think, it means, us the real 99% will pay for the rich and for the entitled class. Who do they think they are fooling?

You want fairness and better for society, promote free markets and take the power awway from both, the rich and the government class.

Wrong. It just changes the means of theft from inflation to deflation. A gold standard is a traditional tool of banker oppression.

The proper solution, after the entire population has been bailed out from all debt to the counterfeiting cartel with brand new full legal tender fiat, is coexisting government and private money supplies per Matthew 22:16-22 (“Render to Caesar …”).

So a government jubilee does not mean what you think, it means, us the real 99% will pay for the rich and for the entitled class. Defiant

Wrong. A universal bailout would reduce wealth disparity.

Example: A has $100,000 and B has only $1000. A has 100 times as much money as B. Now give both A and B $10,000. A now has $110,000 and B has $11,000. The ration is now only 10 to 1.

Of course you will scream “Inflation!” but the bailout could be combined with a ban on further credit creation and metered to just replace existing credit as it is paid off for NO CHANGE in the total money supply (reserves + credit).

Let explain what a real free market would look like and then will compare with the socialist, aka free loading thieves.
You wrote:
“A free markets requires a non-fiat currency, like gold, which would limit government theft. The rates are set by the market. You want to Allende, you decide the rate, the borrowers.decide if this suits them. If you lose on a transaction no-one gets bailed out.”

Why should a yellow metal be money? The only reason why people gold has value, both throughout history and now, is because they believe it has value. Other societies had believed in the value of many other materials and used them as money; in post world war 2 shanghai, cans of fish were used as currency. Silly, is it not? It is only a little bit less silly than believing that gold has value.

I posit this… Money of a nation has longterm value when there is resources, capitol, knowledge, and a good degree of goodwill, social cooperation and trustworthiness in the people. If not, the money will not hold value

“In this scenario money, capital flows from the irresponsible to the responsible. There is no misallocation of capital, as doing such means failure and no bailout.”
You have a greatly flawed assumption, that socially powerfully people can be held in check by a free market. A free market, which means there is no oversight, will not have any inherent perceptiveness or will to be able to limit the accumulation of social influence, obligations and loyalty of a socially powerful individual. Eventually that person can rise up to usurp the law of the land and govern for his own benefit. And there area many example of powerful dictators and kings, who were brilliant at war and influence, but who were inept and governing and allocating or using Capitol. Even a democracy for only the wealthy can be
Usurped, over time…study the political and economic
Evolution of Rome post the fall of Carthage. The governements of Africa and south America in the 1950’s to 1990’s are also a good example…
Governments had may or may not have had many laws, but they were weak at enforcement and honest governance, strongman could rise up and influence the police an military and laws to fit their desires.

” The solid currency means bankers nor governments will steal your hard earned wealth. It measure that the more productive society becomes, the more earning power they should have. This is sharing the wealth ok?”

What do you mean by stealing? Do you mean price inflation? Banking regulations govern the availability of credit, and rising credit allows people to bid more aggressively for goods, hard assets like homes, and services. If demand for goods outstrips supply then eithet the price will
always rise, or the volume of transactions will collapse (sellers refuse to sell at the price), irregardless if your currency is backed by Gold and/or even with the aid of price controls.

“Socialism pushes for governments to fix all our troubles. The issue is, the people in government are rich and wont shoot themselves in the foot. So a government jubilee does not mean what you think, it means, us the real 99% will pay for the rich and for the entitled class. Who do they think they are fooling?”

A government can be run for the benefit of the 1% or the 99%, irregardless of the type of government. What counts is culture and the character of the people, and the government, and the acknowledgment of virtues and vices of human character.

You want fairness and better for society, promote free markets and take the power awway from both, the rich and the government class.

Your logic is wrong… The present rich would be replaced with a new set of unelected power hungry factions, who would satisfy their desire to become rich by enforcing their will on the rest of us via force, coercion,
or deception.

Just stop participating by paying America! We can create our own debt jubilee. These are ALL unsecured debts. These crooks flushed morals down the toilet decades ago. Their lack of morals with the peoples money will lead to their demise and our freedom from their fraudulently induced debt slavery.

“”The financial behaviour that emerged is just what most would do, given the chance. Blaming individuals is not the way to solve it””

Bullshit. What you’re saying is because some bankers decided to fuck people over, its OK. It was the system that done it. That reminds me of the jokers that say guns do the killing. I say if they gamed the system or set rules in place to do so, send them to jail for a long long time. And to the regular ‘pound you in the ass’ type. Not any country club.

“And to the regular ‘pound you in the ass’ type. Not any country club.”

I agree that many from the financial sector should be tried and if convicted, sent to jail. I share your anger that this has not happened.
However, I do not approve the use of sexual torture on convicts, not bankers, not murderers. That we allow this to go on and joke about it coarsens our society in a significant way. It makes other forms of torture less obviously repugnant and it makes it seem less repugnant when agents of the government threaten dissidents with sexual torture.

Agreed, Jessica. Although I am a bloodthirsty person, torture is *always* wrong. It serves no useful function, demeaning and injuring both the torturer and the tortured — and is actually shown to be more likely to make the tortured person behave worse in future.

I believe that the criminal bankers who have orchestrated a national scheme of fraud, including defrauding almost every court and every local county clerk, for the purpose of stealing peoples’ homes — I believe these people should be convicted and then removed from society permanently, so that they can do no further damage (fraudsters tend to re-offend).

Life imprisonment without parole is usually sufficient for that, but these people are so rich and powerful and well-connected that they might figure out how to get out of prison.

For very powerful prisoners who are capable of paying private armies to break themselves out of prison, there is only one way to stop them from committing crimes again: execute them. Quickly and humanely. The guillotine is quick and humane.

Jessica, I do agree with you, and abhor the prison system for the 99%. I was simply trying to make a point that the bankers who commit crimes should not be treated better than anyone else when convicted. The truth of the matter is that most of the 1% who manage to spend any prison time, do so in country club atmosphere prisons with absolutely no mistreatment. That’s just one more thing entirely wrong with our legal or justice system. Some people are more equal than others…. where do you start?

Thank you.
Yes, where do you start?
With finance sector criminals, I think stripping them of their wealth might be more effective punishment. Those who hurt other people through their control fraud should be left penniless and banned for life from any finance related jobs.
I think that would scare them more than a year or two playing tennis with other white-collar criminals.

“It seems to me that the best way to hurt rich people is to turn them into poor people.”
Eddie Murphy as William (Billy) Valentine, Trading Places, 1983
The problem is, they already know that they are poor people. They alone know that their “money” is worthless. More and more does not give them any thing but what it is–computer bookkeeping entries of digits of debt.

Yeah, yeah, that’s it; it was the system, yeah. That’s the ticket! The models were bad, mistakes were made; let’s not point fingers. Gang-banksters and moneychangers are not bad people; they just got sucked into something beyond their control. Any of us would do the same.

This is the essence of David Llewellyn-Smith’s message: adulterated diversionary malarkey! Yes, the system is corrupt, but it was corrupted beyond recognition by sociopaths and predators that gravitated to the scam casino in the first place, bought the people’s house, and turned all of it into an unaccountable den of thieves.

Sure, “changes have to be made to the system”, but for god’s sake, the perpetrators must go to prison. Enough of this “we’re all to blame so no one is” bullshit!

well, given the theory that nothing will change until the indivigual changes, and given the fact that there’s a number of .1% seems to do the job of running the show effectively….or is that .01%….whatever….so what’s that then? – 700,000 or so people to change the world….

but, possibly a proven team like the Catholic church would say who needs so many….just one will do….. so it’s David Llewellyn-Smith for pope then….but what to do with Yves….

The “people” are not the issue. The issue are a few elite and government fraudsters who make tons of noise and fool the masses. OWS is a tniny group of entitled charlatans that are fooling a few college idiots into believing they are the 99%. If they are the 99% than why are they asking the 99% to bailout everyone with the jubilee? Who do you think the government is? I will spell it out – THE 99%..

The bankers are not paying… the government entitled class is not paying…

But both of the groups sure make a lot of noise… squandrals… thieves….

Your self-assuredness is a strength as well as a weakness. In our electoral system it is quite the stretch to call the “government” the 99%. Voter turnout numbers alone refute the statement, never-mind the less easily quantifiable, but readily apparent, gap between middle and lower class influence and the influence of the wealthy.

While there are some here on this forum who promote the idea of a debt jubilee, myself included, I don’t think its fair to conflate the idea of a debt jubilee with OWS. I haven’t gotten that impression from them. They are a mixed group and not everyone shares all the same ideas. There are some common threads but IME, this isn’t one of them. The threads that I’ve seen in common are:

1) we need to address wealth inequality, it leads to political corruption and is a drain on the overall economy 2) we need to actively address the unemployment problem (there will be long-term consequences)
3) we need to address the student debt and cost of tuition issue (another drain on the economy, the GI bill after WWII, along with high levels of infrastructure investment, led to a period of unprecedented prosperity, AND during a period when the public debt to GDP ratio was higher than now)
4) we need to enforce the rule of law equally and fairly, which includes not only prosecuting bankers for fraud but requiring lenders to have proof of debt before seizing people’s homes as required by hundreds of years of contract law and our Constitution
5) we need to get money out of the political system

These are my observations from what I’ve heard people talk about consistently, however to be clear, I’m not a spokesperson for the movement. I don’t hear folks saying they want money and handouts, I hear them say they want jobs. It is only the media that I hear portraying them as saying they want handouts, along with various other misrepresentations, and sometimes gross distortions. Nor are they “socialists” or anti-capitalists. They merely oppose the current system, which they don’t view as true capitalism, but a crony capitalist system, nor are there free markets (though they would likely not consider unregulated markets free markets like you do, instead unregulated markets become “monopolistic captured markets” like now, whereas true free markets level the playing field).

The government is NOT the 99%, nor does it represent their interests. That is where you go wrong. The government has been captured by the 0.1%. For the last four decades, labor has seen their share of profits fall, their share of taxes rise, and their piece of the pie get smaller. As the elite increased their share of the bounty, they’ve also increasingly gained power to write legislation that favors their interests (primarily through the tax code, but also through deregulation), thus increasing their share of profits further. It’s nigh impossible to be elected to Congress, much less the presidency, without getting financial backing from large corporations and the wealthy. If government represented the 99%, we’d have raised taxes on the wealthy, withdrawn our troops from Afghanistan, and wouldn’t be stuck with Obamacare.

Do the same rules apply to he who stole the gold by deceptive practices with the intent to defraud every American…? The criminal deception is the FED BANKS were paid upfront for everything by the American people….They plunder it away and demand payment for money they never lent ……over and over again by any and all means. The biggest deception is the fact they are the borrowers and we are the lenders…criss cross.

Neo-Liberalism or Neo-Conservatism has no answer to the argument that during the course of the last hundred years we’ve had Cannibal Capitalism increasing its domination in fits and starts by finding new and more covert ways to devour demand in the Real Economy. All these ways boil down to two principal means of reducing demand. Firstly, the blowing of inflationary asset and commodity bubbles which increase costs for the Real Economy through price hikes and higher debt repayment sums. Secondly, outsourcing to countries that unfairly manipulate trade through rigging production costs which results in a downward pressure on real wages in the export target countries.

Slowly but surely demand in the developed countries real economies has been squeezed but kept temporarily buoyant at least for the last thirty odd years through a huge increase in private debt which eventually reached an unsustainable limit causing this debt bubble to burst and precipitate a rapid fall into prolonged recession. Until societies in developed economies recognise that the Invisible Hand also operates with an Invidious Hand by producing this dysfunctional demand destroying capitalism the more these societies will move back into the Dark Ages of debt serfdom. Here is Michael Hudson expanding the argument in greater detail:-

Thank you for this excellent analysis and correction of Shiller’s soft propaganda loyal to the Old Economic Thinking regime at Yale.

RE: the “meta-money” system “gaming the rules of share trading” — this is the crux of the Meta-Money System’s looting process, for “customer deposits, together with pension, mutual, and money-market funds are the “real economy” fuel and lubricating oil required to keep the Meta-Money-Machine going at top speed (closed-system HTF, in which peak fractional skimming relies on physical computer proximity to “Source”). Hence, the “open system:” is gamed by the “closed systems” that constitute the Meta-Money Machine.

The Meta-Money-Machine is “The Beast” consuming the “real” substance of the 99%. EVIDENCE that the system is DESIGNED to “game the rules of share trading” may be found (1) in the perverse “innovation” (made by McKinsey?) of the division between “voting shares” and “non voting” shares (what is the purpose of this?), and in the “smoking gun” of the software (the “Software-Becoming-Law,” via the insidious praxis of “creative destruction and construction” of The Law through systemic “Being-There”–Heidegger’s “Da-sein,” re-interpreted and employed for profit by 1% despots [see G.G. Preparata’s book, “THE IDEOLOGY OF TYRANNY” listed below, Chapter 9).

More evidence of the INTENT to game “the rules of share trading” certainly must exist in reality. Certainly it exists in the “Dual System” created by Meta-Money Masters and their political Agents in Office through the trashing of Glass Steagall and the passage of GATT, NAFTA, and “New” laws and regulations favoring the tyranny of the “Meta-Money” System that brought the FinanceState Coup d’Etat to fruition, together with its separate econono-political legal system.

“THE DUAL STATE: A Contribution To The Theory of Dictatorship” by Ernst Fraenkel, translated from the German by E.A. Shils in collaboration with Edith Lowenstein and Klaus Knorr (1941, 2006);

As for “post-capitalism,” connect with the “post-modernism” movement in:
“THE IDEOLOGY OF TYRANNY: Bataille, Foucault, and the Postmodern Corruption of Political Dissent” by Guido Giacomo Preparata (2007).

Consider the parallel purpose of the 1% at an earlier technological moment in history: “Mein Kampf.” The plan remains, the “technique” differs.

Robert Shiller is a brilliant economist. His 1989 book Market Volatility went deep into the phenomenon of volatility not only for stocks and bonds, but also for real estate, a subject to which Shiller would return.

With superb timing, Shiller published Irrational Exuberance in January 2000, the exact month of the Dow’s record high in real terms.

Shiller went on to design the Case-Shiller indices, the most reliable measure of U.S. urban real estate prices. One reason he did so was to demonstrate with hard numbers that U.S. housing was seriously overvalued in 2005.

An unique ongoing service which Shiller provides on his website without charge is an Excel file of monthly U.S. stock prices and dividends back to 1871. It’s posted here:

And yet, despite the headline, this article basically says Shiller is correct about everything except a short list of things — and that it’s worth paying attention to the few points where Shiller is wrong, because Shiller is wrong so rarely.

So what’s your point? That the headline is overly inflammatory? Conceded.

Oh please. I was much more polite back then and I gave a qualified review to Irrational Exuberance. And Shiller is a huge promoter of the barmy Arrow Debreu idea of creating more trading markets in everything.

ALERT: JPM’s “get out of jail free” card is being dealt at http://www.truth-out.org in article about the “legal” loophole in the Volcker Rule.

The plea for “Justice” rather than “the Law” is made in the divine courtroom scene of the film of 1941 by Powerll and Pressberger, “A MATTER OF LIFE AND DEATH (Stairway to Heaven).

Since the “law of the land” (Constitutional Law) has been destroyed and replaced with Global Finance Law of the State (esp. via Unitary Executive Finance Agents Clinton, Bush, Obama), we must return to the practice of justice.

Dimon may have inadvertantly called out the traitors in_CONgress_ and_ ALERTED_the American people that it is CONgress who is ALLOWING this fraud to be committed overseas with the American peoples money. Because it was committed overseas it cant be controlled or prosecuted .. Its the quasi fraud deception…like the GSES …!!

I will say that once enough people are frustrated, it becomes literally impossible for the government to prevent people from assembling, so this particular form of oppression is going to lose its effectiveness as the situation gets worse and worse.

Leonova…there has been an annoying hum that has been being reported all over the country and in Canada for quite some time. The Government is trying to downplay this. Scientists have detected this but, haven’t really pinpointed the cause. People describe it as a low hum that drives them batty. I heard this a couple of weeks ago and thought it was a lawnmower from a distance but it went on for hours and I haven’t detected it since. Thinking it could it be some sort of weapon they are testing for the NATO Summit? It sure was annoying. These jerks are evil and I would put nothing past them.

Funny you should mention those things (google LRAD, if i recall correctly)..since, I might (should) be? a patent holder of sorts for one of those darned weapons;
I called into am FM radio broadcast show in 1979; the topic was how to free the Hostages in Iran (Teheran) without killing everyone–I suggested some sort of Sound weapon, that could possibly (atleast temporarily) disable the hostage takers (though it would effect all there, no permanent damage would occur to the hostages) just long enough for ..ya know, .. the black helicopter people to storm the place.

Nathaniel…without a right to bear arms we have no way to protect ourselves or our families or our property from our own Government that has become completely corrupt and is acting like a tyranny and is oppressing the American people. Without a doubt the NDAA and the destruction of our right to assemble proves the right to bear arms is our last gatekeeper.

While I appreciate the commentary showing the shallowness of Mr Shiller’s take on the good society, it would be better if the substantial research and writing on politics and society by people who actually know something about those perspectives equal to the economic talent, were regularly presented. Mr. Shiller is rightfully held in high regard as far as I can see. And he has built a career on a subject, housing, that is more important to most people as homeowners and all people, because we need a roof over our heads. But when we consistently turn to economists to provide us intellectual ammunition for clarifying the muddle politics and Rube Goldberg contraption theories of capitalism and society, I just want to go to youtube and listen to “The White Album”. If I am going to hear the nauseating refrain of corrupting capitalism (military intelligence) can be restored to its humble origins by fill in the blank amateur policy directives based on bizspeak spokes persons, I am going to have to take my business elsewhere.

“We now have a system in which the financial players make up their own rules. Little wonder that the systemic problems are massive (see point 1).”

This is the heart of the matter. That, plus the abdication of just about everyone in government who was supposed to be minding the store. (Looking at you, Greenspan, you charlatan.)

Everybody wants to blame individuals for greed – Joe Hardhat for buying too much house, for example. But why did Joe think he should buy more house and invest in the stock market? Because his wages didn’t keep up with inflation. Because his job lost security over the decades he had it. Because nobody in government even tried to address these systemic problems with the deregulatory environment they created over the past two decades.

(And now people have lost their homes, their savings, and their miniscule safety nets are busy being savaged by the likes of Paul Ryan who condescendingly tells us that we are to blame for being on food stamps.)

I’ve come to the conclusion that the main problem is that finance and government have not only created their own rules, they’ve created their own religions. Which is why the simple solutions of re-regulation get nowhere: nobody in the system wants to admit failure or that it isn’t working. It would be a betrayal of their most deeply-held beliefs. That, plus they don’t want to see the gravy train stop. Add in some obvious sociopaths in Big Finance, and you get the stew we’re in now.

It is up to us to say something and insist on being heard, by any means necessary.

Don’t confuse capitalism with fiat. Fiat is a failure, but capitalism works. The next step is to take it up a notch and institute free markets, real free markets.

The biggest failure is not the banks, not the bankers, not the borrowers, the biggest failure is the GOVERNMENT for selling us down the river. Now they offer “solutions” to screw us even more. Bunch of charlatans.

And to think the OWS is in cities around the country, it goes to show how easily the masses are suckered into believing garbage.

You government removed glass staegel, you pushed for home ownership and even pushed bankers to make loans, you looked the other way as bankers committed fraud, you bailed out the failing banks, you bailed out the irresponsible borrowers, you are now throwing our money down the drain buying votes (creating jobs).

You can stomp your feet and say “capitalism works” all you want, but capitalism has no way of addressing, much less overcoming, the Limits to Growth.

There’s increasingly less and less surplus to go around, and you can’t have profits without surpluses. This is a situation that will continue to worsen as population grows, the environment degrades, and the oil runs out. Without the prospect of profit, there is no sense in investing. And in fact the only “investments” that are “making money” these days are largely the gatekeeper/extortion rackets of FIRE and more recently the education and health care rackets. But the wheels are falling off of those, too.

Here’s a couple of examples: Big Pharma has “compliance” teams to make sure people don’t stop taking their meds due to expense. They don’t actually lower the price or anything, they just try and harrass people into “compliance”.

Another freaky thing I saw, which I think is representative of the general dysfunction of capitalism, was an ad for new Fiat Pandas. If you signed up for debt to buy this new car, they would take out an employment insurance policy on your behalf to ensure that you’d be able to make the car payments!! This insurance of their own cash stream was presented to the customer as a benefit… how sick is that? The debt/profits must be booked at all costs. And they must grow exponentially. You could switch from fiat to a gold system tomorrow and the imperatives would still remain.

Another way of organizing ourselves is necessary, whether you like the idea of it or not. You’ll likely come around to it, eventually, one way or another.

I marvel to this day that my RWNJ sister took on a $300k mortgage when she could have paid cash. Having gone to a BUSINESS SCHOOL (worse, a “Christian” business school) she thought this was wise: to commit herself to paying $300k over and above the price of the house to some random bankster/predator (the same kind of person that she wished to be, one who skimmed money off the top). She did this out of RELIGIOUS DEDICATION to The System, no different from any dupe of Amway or Oral Roberts.

Everything with these control freaks is a theory based on their IDEOLOGY….THEIR BIG IDEA. If it makes no sense and leaves you scratching your head it is the NWO. Being Catholic all of my life, I always wondered why priests wear dresses and wear funny hats and why they use strange rituals to transform wine into blood and a wafer into a body and make you eat the body and drink the blood of Christ. Thankfully, I have come to my senses now and I realize that I was deceived and those people really are nuts. They took my belief in a creator and used that belief to deceive me about their true identity. I now realize that those dresses are weird symbols and those rituals are
just weird and sadistic.

Defiant, the <1% aberrant and immoral wealthy elite — through their ever more powerful each day now illegally and immorally created corporate structure coupled with an incredibly well orchestrated use of the Noble Lie — now own and control the government at all levels. Their media has made you what you are. They don’t sell you a product. YOU are their product.

You do not know your history and are locked into the brainwashing of the present. You have been born into a system of generational slavery and like a child born into a dysfunctional family you love and believe the lies of your aberrant and evil parents. The tell is how you so confidently promote their false memes and strive for the carrot ideals of free markets and capitalism. It is the corruption by the abberant and immoral <1% that promotes these ideals and subverts them at the same time.

Their corruption of government — now owned by them lock stock and barrel — gutted Glass Steagal, created the FED, created corporate person hood, and now brainwash the public at will with their ‘Greed and Evil Are Good’ meme. This is not an economic war this is in its totality a moral war. I will concede that those less than half of the 99% who do vote give up their power and validate and legitimize their own oppression and destruction by doing so. But they are mostly brainwashed too with some fewer knowingly and willfully complicit.

They also created and sold you the (sub dominant to the above ‘Greed and Evil Are Good’ meme) the ‘Government is the problem’ and ‘Privatization’ is the savior meme. It is the ‘government sector’ against the ‘private sector’ meme. It is a powerful deception that rivals racism in its divisive of society impact.

You aid and abet them with your gullibility in promoting it.

You are what you have been through, but now and the future are up to you.

Warren Celli: “Their media has made you what you are. They don’t sell you a product. YOU are their product.”

Exactly. In Peter Weir’s The Truman Show, Truman’s life is controlled by the television show’s director Christof and his production team who operate out of the set’s artificial moon. Having been adopted by the television network at a young age, this reality is all that Truman has ever known.

During an interview, Christof states, “We accept the reality with which we are presented. It is as simple as that”.

And if our identity is created by the media, as it is more and more, then our world view is limited to the world view of the media. Discourse is created and perpetuated by those who have the power and means of communication. Those who are in control decide who we are by deciding what we discuss.

chitown, re GHW Bush’s “BIG IDEA” and the ceremonial experience in the Roman Catholic Church, it’s all theatre. The late scholar and poet Robert Champigny explained how “religion” is “theatre” in actuality. The physical church/synagogue/mosque/mega-church is the “mise en scene” where the “religious” rites and ceremonies are enacted by priests/rabbis/imams/preachers and supporting cast onstage in appropriate costume, playing roles with (mostly canned) scripts and using stage properties (“props”), often with “uplifting” musical accompaniment and choirs, as in grand opera. In religious theatre, the “audience” participates, becoming “sanctified” as they play their roles in interaction with the “sanctifiers” in charge of the “sacred drama.” Think about it.

I’ve come to the conclusion that the main problem is that finance and government have not only created their own rules, they’ve created their own religions.

Indeed; it’s called Secular Humanism — where men are Gods — where complete and utter irrationality rule the day; never coming to terms with “ex nihil lo, ni hil fit” (Out of nothing, comes nothing).

Why would anyone think there ever could be a reasonable, sane and sustainable answer/fix to this Global Economic meltdown, wwhen most refuse to logically conclude that there exists something much greater than any one of us?

[“3. Allowing traders to make up their own rules means that the subordinate role of finance, its function of serving commerce, has been altered, very much for the worse. Shiller argues that finance should support business, it should be humble. That is what will not happen in the current system, or at least not happen often enough. It has become a world unto itself, an exercise in gaming a system of rules in a potentially endless regress of making money out of the money made out of money.

4. We are now in that world of “meta-money”. Its most extreme iteration is high frequency trading, which, especially in stock markets, is a travesty of capitalism. The purpose of stock markets is to raise capital to fund public companies. The trading in nano seconds has nothing to do with that; the algorithms make no distinction between companies. It is just an exercise in gaming the rules of share trading. Same with currencies, which is also dominated by high frequency trading.”]

**For some reason, these lines evoke a Matrix film scene for me… (when Agent Smith is interrogating Morpheus) :

[“I believe that as a species, human being define their reality through misery and suffering. For the perfect world was a dream that your primitive cerebrum kept trying to wake up from. Which is why the Matrix was redesigned to this: The peak of your civilization. I say -your- civilization because as soon as we started thinking for you, it really became -our- civilization. “]

That statement accepts the false premise that Shiller’s world once existed.

Accepting a false frame of a problem renders any subsequent disagreements about its solutions irrelevant as the frame defines the range of acceptable solutions.

Finance never has been and never will be “virtuous.” Finance always has and always will be parasitic and, when abused, oppressive. Finance, like nuclear fission, can be put to productive use (instead of destructive use), but even when the short term result appears benign, you need to carefully consider the long term consequences.

Interesting perspective on “It’s a Wonderful Life”–propaganda piece for fractional reserve lending. Actually, the Building & Loan was probably loaning dollar for dollar, which would not have been fractional. That is why they Baileys were all chumps, according to Mr. Potter’s property manager.

You are the Hippocrat promoting fairness while promoting an agenda that benefits you, and only you. I am willing to busy my ass to feed my family. I struggle every damn freaking day in doing so. Guess what Beard I don’t want a penny from you nor the government nor anybody else. I have put myself in this position and take full ownership of it.

When will we start growing some and owning up to our responsibilities?

You are not only wrong you are a fool. The government should provide basic necessities, not an ounce more. Your thinking is dangerous and synonymous of Hitler mentality. The Germans sure got a lot of help from him.

No, you are a coward and a squandral. You are worst than the bankers and wealthy. At least its clear that they are thieves. You are more like Judas. You use all the statements from the bubble, to hide behind them.

Not to worry Beard, I will leave this socialist Utopia. But the next time you see me, the real 99% will be standing behind me and ready to procecute the bankers, the government fraudsters, and the entitled class, like yourself.

Anyway, Defiant, for better or worst has a right to speak without you projecting unknowable crap as facts.

Skippy… unless you are some self appontied pope or some crap like it, stop the BS or does the NASB rewrite all other cannons with gawds stamp. What a dickhead. Anyone that attaches their wagon to your draft… should get their head checked.

The definition of Socialism is that the State owns all the means of production. I have never seen an actual Socialst post a comment here, Mr./Ms. Defiant.

I would rather agree with Marx, who said that workers should control the means of production. I just see future production taking place at a less-global, less-industrial scale, for reasons beyond the control of either (modern-industry-dependent) capitalists with their global imperatives or (equally-industry-dependent) communist/socialists with their global imperatives. The decrease in available energy will dis-empower large complex systems, and will render what you call “capitalism” and its so-called “free market” impossible, a moot issue, at least on the global and national scale we have known it all our lives.

“The government should provide basic necessities, and not an ounce more”: Yeah, well, the “multitudes” of benefits the government presently bestows on the indigent doesn’t even cover the basic necessities or a minimum standard of living. And they’re slicing and dicing benefits down even further, in case you haven’t noticed.

Son, I believe you are having a hard time economically, but snarling alone in your cabin is not going to render a solution – either for you or anyone else. The heroic, defiant individual was, and is, a myth.

As the man says, Deception is the strongest political force on the planet.

“It is true that many bankers and financiers are not unusually bad people.”

Maybe not in the sense of psychosexual failings that lead other people to the hobby of serial killings or torturing small animals. They’re like the cops who stomp on the faces of teenage girls in Occupy demonstrations, they’re “just doing my job.”

They’re both products of a corrupt system, but not everyone would survive and thrive in that system. If the cops weren’t bullies before, they learn how to kill their conscience and continue beating defenseless people. If someone in finance had a higher vision of their work, they’d have to choose between going to work and going into the big, cold world. Both have decided the rewards of upholding a perversion of their stated social function are better than the costs of behaving like a human being.

methinks you refer to Mr. Schoolhouse, and a certain Brooklyn Precinct (and we all know it’s not an ‘isolated incident’ as the propagandists and MSM would have us believe). Care to have your Iris scan in their databases? Perhaps a full-body cavity search? …just Peacably Assemble, and your wishes will come true.

RWNJ sis came out of her “Christian” business school (Pepperdine, home of Kenneth Starr) wanting to set up a biz called “Rent-a-Wheel”, a predatory, over-priced Rent-a-Center for those expensive (multi-thousand-dollar) alloy wheels popular among “urban” populations, particularly in LA.

Lidia….Bill Black described the result of the banksters getting away with the fraud would be a crimogenic society. There are desperate people who cant pay their bills because of what these bank predators did. As a result, people are getting into more trouble. I have a friend who couldn’t pay his current property tax bill and got into trouble with a car title loan shark. The predator sharks are circling. This is proof that fraud vitiates everything. It starts at the top and works its way down.

“Blaming individuals is not the way to solve it, deeply satisfying though that often is.”

While I agree wholeheartedly agree that the problem is systemic, I nonetheless think there’s a key utility in blaming individuals as well.

If we apply the Nuremberg principle, just following orders (or just doing what the system allows) is not a defense. If we aggressively prosecute individual bankers, we need not do so in place of tearing down the system and building another. Rather, prosecutions and severe punishment can be a way of reinforcing the idea that finance must serve a humbler, useful purpose, no matter the system.

The system can operate without much regulation if the government doesn’t reward TBF for bad behavior. Let the banks commit suicide if that’s what they want to do and build an alternative system on the ruins. There are many solvent non-fraudster operated banks in this country that could take over the business of the TBF bank. The gov’t would have to take over those banks for about a year and provide financial services temporarily (hiring the non-criminal people from the TBF banks).

All banks and even credit unions are crooked. Why? Because they issue “credit” (new, temporary money) in a government enforced monopoly money supply for private debts. Thus there is no escaping the resulting price inflation.

Yes, there are “prudent” banks, just as there are “prudent” thieves but that does not make them any less thieves.

Well yes, I think Shiller is not my favourite, even if he is generally on the same side of the political gulf. He has far too much faith in finance. I think this is right, finance is not just a tool we can use, it is a monster we need to control. I certainly don’t have much in faith in private insurance, which I think has some fundamental conceptual problems (mainly that it is not compatible with competition and limited liability – promises made about the far future are not necessarily enforcable, and the interpretation of fine print is uncertain).